Getting Started with Tax Deeds and Tax Liens
I’m Sandra M. Edmond a full time real estate investor, licensed real estate broker associate and trainer. If you are new to real estate investing or tax deeds and liens, this is the page for you! It contains the information you need to get up to speed quickly and start investing with confidence. I will update this page periodically so be sure to check back for updates.
Definition of Tax Lien Certificate
Represents a lien of unpaid real estate taxes. Interest accrues on the tax lien certificate until the taxes are paid. In almost every state a tax lien is a first position lien (senior lien).
Definition of Tax Deed Auction (aka Tax Deed Sale)
A public auction where property is sold to the highest bidder in order to recover delinquent property taxes. A tax deed wipes out almost all liens except certain government liens.
Sweet 16 Steps to Success
Prepare for the Tax Deed Sale
- Attend at least 3 sales before you bid.
- Pick a county or two to buy tax deeds. Here is a list of all the Florida counties. Scroll down to the bottom of the page for the National Association of Counties link for counties in other states.
- Create a file for each county and put everything you learn in that file including the rules, names, phone numbers, notes on what they told you etc.
- When you get to the auction, introduce yourself to the person you spoke to on the phone.
- Get the list of upcoming properties going to sale
- Get answers to all your questions (I have a nice list of questions you can use)
- Get a map of the county.
- Decide how much money you would like to invest.
- Research properties on a list using an excel spreadsheet or property analysis form.
- Go see every property before you bid!!!
- Pick the properties that meet your criteria. Your criteria may be influenced by your budget, if it is vacant land or a house and what kind of work it needs.
- What is your exit strategy? Do you plan to fix it up and hold on to it or do you want to resell it?
- Can you make a profit on the deal?
- Drive by the properties that are now on your short list and get pictures of them.
- Order a title commitment or do your own title search using the county’s official public records. If you want to save money, I would advice you to learn how to do your own title searches. Most title companies charge $85-125 per search. Your better off doing it yourself because most often your short list of properties will contain about 8 properties (on average) that you need to title search for each sale.
- Mark your auction list.
- Every couple of days check your list and verify what properties have been removed from the auction list. If a property owners pays the delinquent taxes, the property is removed from the sale list.
- Review your notes, recheck your numbers and head for the sale.
Frequently Asked Questions – Get the F.A.Q’s
Must Haves When You View Property
Must Haves (continued)
- Google Apps – which includes google spreadsheets, drive, voice, calendar etc
- YouTube – to post your videos of properties. I would recommend you make the video private or unlisted.
- Digital Camera – to take pictures or video. A cell phone will do if it has enough memory to store your videos and pictures.
- GPS – You can use a stand alone unit or the one on your cell phone. This is useful for navigation.
- Postlets – A free service to make flyers of your property and it shares the flyer with over a dozen websites to help you find a buyer.
- Insect Repellant – Wasp spray and/or flea spray comes in handy.
- Jeans or long pants – Because of the above.
- Flashlight – It doubles as a self defense tool as well as a light.
- A Buddy – It’s always a good idea to bring someone along when you are looking at houses. There is safety in numbers.
- Business Cards – I give mine to the people living in the property. If the property is vacant then I will give them to some of the neighbors.
- A pleasant demeanor and self confidence
- Closed toed shoes (Ladies we have to leave the cute shoes in the trunk if they are not safe.)
- Contract – Purchase Agreement or Option Agreement
- Team – My local real estate investors association cfri.net makes it easy for me to build my team. Find a REIA in your area and join. It’s the best investment you will ever make in your real estate education and resources.
A pleasant demeanor goes a long with the ability to communicate with a home owner as well as a tenant, vagrant and/or neighbors. I find this and self-confidence to be one of the best tools to getting the information you need for the outcome you desire. If you don’t believe in yourself, why should anyone else. People can sense your lack of self-confidence about as well as a dog can sense fear. On that note if you find yourself in fear, its ok, just DON’T SHOW IT.
More info on Buying before the auction and Talking to Sellers.
The Night Before the Sale
How to Drive for Dollars Parts 1-4 Playlist (wholesale opportunities)
Many of the properties we buy we sell them right away. We do very little work. Most of our deals we get someone to clean out the house, sometimes we paint, do a little landscaping and that’s it. Our buyers are generally other investors like rehabbers or landlords. They will finish the work out. This gives us the flexibility to get our money out of the deal quickly and onto the next deal. If you price the house right you won’t have a problem finding buyers. There is a popular saying in real estate, “You make money when you buy not when when you sell.” This is why it’s very important you learn how to run comparable sales (comps) so you can come up with accurate property values. Miss this step and there may be no way for you make money on the deal.
Miss a lien on a property and there may be no way to make money on that deal either!!!!